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When casually talking with entrepreneurial friends and colleagues, I inevitably get around to the subject of how they do their accounting. Most small business owners I know do it themselves. This works well for them because they limit costs and are managing their business off the cash balance in their account, not off their financial reports.

As entrepreneurs become more successful, they begin to spend more time on sales and operations, leaving behind some of the other hats they used to wear, allowing them to gather dust.  The accounting hat, unfortunately, commonly becomes one of these dusty hats. Bookkeeping is tedious, requires detailed information as well as a fair level of training and research.

For all of the entrepreneurs out there who see their accounting hat gathering dust, here are 5 benefits of outsourcing accounting services for your business.

1: Automation

With the advent of cloud accounting apps and software, the ability to transfer data between systems has allowed for a significant amount of automation not previously available. But what systems and apps should you choose, and how can you take advantage of all their features?

A cloud accounting firm can be a great resource to explain the accounting systems available and which would be the best fit for your business. You can leverage the knowledge of the accounting firm without having to spend a significant amount of time researching apps and setting up your systems.

Caution: You will want to make sure that the accounting firm has experience and expertise in dealing with the apps and software to be used.

2: 24/7 Financial Advice

Having an outsourced accounting firm can help you in pivotal moments for your business. An expert accountant can provide invaluable information, as many packages offered by these firms include email and/or phone support. An accountant can answer your questions and share their previous experiences that will lend wisdom to your business decisions. There is entity structure, tax planning, growth strategy and many more topics that most entrepreneurs need to be advised about.

I would recommend finding an outsourced accounting firm that listens well, and has a proactive approach to your accounting, so you can rest assured you aren’t missing out on something.

3: Peace of Mind

Our clients frequently provide feedback, and they tell us that they experience peace of mind when it comes to their accounting. They can focus on running their business because they know they don’t have to worry about their books. In most cases, we are handling their bookkeeping, payroll, as well as their financial reporting. Receiving a financial report at the end of a month, without having to put more than several minutes into it, is relief for our clients.  Having someone to review these reports with you, and discuss how it applies to your business, is even more satisfying.

Outsourcing your businesses accounting can free up a lot of time, and reduce some of that unneeded stress your business places on your shoulders.

4: Lower Tax Preparation Fees

Most CPA firms charge by the hour for tax preparation.  The reason is simple, many CPA firms receive incomplete or grossly inaccurate accounting records to prepare the return. So they steer away from fixed prices because they know they will have to a lot of accounting work to do in addition to the tax preparation itself.

If your books are kept up to date by an outsourced accounting firm, you can count on a fixed price bill for your tax return preparation, since most of the tax prep work will be eliminated.

So not only do you get the value of timely financial information all year, but you’ll save several hundred dollars on your tax bill.

5: Outsourcing Accounting Services is Affordable

When I was a teenager, my dad operated his own carpet cleaning franchise.  At that point he didn’t go out and do the work himself, he was in the office scheduling appointments and acting as the office manager, while his other employees did the actual carpet cleaning work.  I watched as he spent countless hours invoicing, recording transactions in Quickbooks, filing papers, and reconciling transactions. I’d estimate that he spent at least 60 hours per month doing bookkeeping, payroll, invoicing, and check deposits. It was very stressful and frustrating for him.

Fast forward to present day, the exact type of business my dad operated can have its payroll, bookkeeping, and reconciliations performed for somewhere around $500/month. That’s way less than hiring a full-time bookkeeper, and allows the business owner to focus on generating more revenue for his business, while not wasting time doing accounting tasks that take him away from it.

Back to my dad real quick, essentially he was making about $8/hour doing that accounting work – definitely not what he was worth, or the best use of his time. Is doing your own accounting the best use of your time?

Conclusion

With the cloud making it so much easier to automate and collaborate, the cost of accounting has dropped to a level that is not only affordable, but actually makes sense. An entrepreneur can now have timely advice, be informed about his finances, and have peace of mind knowing that his accounting is being taken care of.

So take that dusty accounting hat off the shelf, and hand it over to an outsourced accounting services. It just makes sense.


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